A handful of residents appeared at the first public electrical aggregation hearing held prior to Monday night’s Pontiac City Council meeting.

Steven Smith of the Farnsworth Group outlined the city’s plan to offer to place residents and small businesses into an aggregate and purchase electricity at a discounted rate.

One resident asked whether that supply cost would fluctuate and whether other fees and costs would be attached.

“The price established in the contract, the cost per kilowatt, will not fluctuate the length of the contract. Some communities enter into one, two or three-year contracts. Whatever the length, the price negotiated won’t fluctuate. It won’t be higher in summer or lower in winter.

“And this aggregate only affects electrical supply, which is one line on the ComEd bill. Both ComEd and Ameren are before the ICC (Illinois Commerce Commission) looking for rate increases. We don’t have anything to do with that. That is their cost for the fixed services, such as delivering electricity into the homes, their fees and taxes. We are only talking about savings with electrical supply costs. ComEd does not supply electricity, just delivers it.”

Depending on how much electricity a resident uses per month, they could see savings anywhere from $15 to $30 per month on the cost of electricity supply. Officials have stated previously that conservatively, the city’s 4,000 residences could save around $120 per year on electricity supply costs if they stay in the aggregation.

Smith added that while there are hundreds of electrical supply vendors in Illinois, only two dozen or so are licensed aggregate suppliers and those are the companies the city will chose from when selecting bids, if the program is approved by voters.

“These are not third-party vendors. These licensed suppliers are companies that have their own electricity supply that they are providing.”

Smith said residents and small businesses using less than 15,000 kilowatts of electricity per year would be placed into the aggregate. Those who do not want to participate may opt out with no cost. Those who opt out initially may opt in at no cost at any time during the length of the contract. However, residents who initially opt out, then want in, but then decide to opt out again would have to pay the state’s default supply cost (no specific supplier) for a year before they could opt back into the program or get an independent contractor on their own.

“It just would cost too much money to have people change their minds every 30 or 60 days,” he explained.

In response to another question, Smith said the program costs the city nothing and that most suppliers will make discounts to larger businesses, schools, libraries and other government entities, but not on the scale of residential savings.

Page 2 of 2 - Once the contract is up, the city can choose to extend the contract, re-open the process for bidding, or drop the program if residents are not enrolled.

Members of the Pontiac City Council later approved the city’s plan of electrical aggregation governance, including specifications the city has that qualified bidders must meet to get the supply contract.

It was noted at an earlier meeting that the city has specified that if the ComEd default supply cost goes below the contracted supplier’s cost, that cost must be met or everyone in the program would be switched to ComEd’s default supplier.

Smith will give another presentation this Wednesday evening at 7 p.m. at the City Council chambers. He will also be speaking at an Issues and Eggs event Wednesday morning and to the Pontiac Kiwanis Club later that afternoon.

Flyers explaining the program are available at City Hall and the program is detailed by Farnsworth Group and linked on the city’s website, www.pontiac.org.

Pontiac, Fairbury and Streator are all proposing electrical aggregation programs and all three have the plans on the April 9 ballot. A simply majority is needed for passage.

Smith said there are 400 communities in Illinois that have approved electrical aggregation, while some 25 communities voted it down. He said only in a couple of communities has the plan failed the second time it came up for a vote.

“This is just something that communities are now allowed to do for their residents. It can provide some real cost savings to people,” he said.